Photoshop at 25: A Thriving Chameleon Adapts to an Instagram World

The history of digital technology is full of innovations that are praised for having changed the world: the Mac, Microsoft Windows, the Netscape Navigator browser, the iPod and countless others. Then there are the many products that changed the world and were suddenly overtaken by some newer, purportedly better thing: the Mac, Microsoft Windows, Netscape Navigator, the iPod and countless others.

What’s rarer in tech is the product that causes major changes, hits turbulence and then, after some nimble adjustment, finds a surprising new audience.

This week is the 25th birthday of one such aging chameleon, Adobe Photoshop, an image-editing program that was created when we snapped pictures on film and displayed them on paper. It has not just survived but thrived through every major technological transition in its lifetime: the rise of the web, the decline of print publishing, the rise and fall of home printing and the supernova of digital photography.

Photoshop attained the rare status of a product that became a verb — like Google and Xerox. Along the way, it became a lightning rod for controversy because of, among other things, the way it can be used to turn women’s bodies into unnatural magazine-cover icons, or its use by propagandists and your casually mendacious social-networking buddies who doctor their vacation snaps.

But now, for all its cultural cachet, Photoshop risks missing out on a far larger market of casual photo bugs and their smartphones. Once, for better or worse, we Photoshopped photos. Now, more often than not, we Instagram or Snapchat them, and everyone, it seems, is a photo editor. But not everyone needs or even wants a fancy program like Photoshop.

“When I took over the business in 2010, I realized that the growth in our business did not match what was happening all around us,” said David Wadhwani, the executive in charge of Adobe’s creative software. “Visual expression was on the rise everywhere. Our business was a solid business, but it was not growing at the pace that we felt it should.”

So Adobe is taking a big risk and reinventing Photoshop.

The process actually started in 2011. Rather than selling licensed copies of Photoshop and its other high-end creative applications for hundreds of dollars each (Photoshop used to sell for $700 a copy), Adobe began offering monthly access for as little as $10 a month.

The price change was initially met with fury from loyalists, who didn’t like the idea of renting rather than buying. Because subscription revenue comes in over time, the change also took a toll on Adobe’s bottom line. Its annual net income declined 65 percent in 2013, and it fell 13 percent last year.

But the company sees the decline as the short-term cost of a long-term plan. By lowering the price of Photoshop, Adobe hopes to democratize access, gaining new users who, in the past, wouldn’t have been able to afford $700 software.

The trend looks promising. Adobe now has 3.5 million subscribers to its Creative Cloud suite of apps (which includes Photoshop), and it expects to have nearly six million by the end of this year, with annual revenue generated by those subscriptions approaching $3 billion. It’s on track to beat the record $3.4 billion that Adobe made from selling boxed software in 2011.

Adobe also has grander plans to break up Photoshop into a number of apps, some of which it will make itself, with others made by third-party developers who will have access to Adobe’s image-processing systems online. In some cases, those apps will even be free.

“The goal is to go from tens of millions of people benefiting from the technology within Photoshop to hundreds of millions of people over the years,” Mr. Wadhwani said.

Adobe’s move to apps and the cloud has earned plaudits from optimists on Wall Street. To understand why, it helps to understand Photoshop’s history.

Photoshop began as a way to procrastinate from working on a doctoral thesis. In the late 1980s, Thomas Knoll, who was studying computer vision at the University of Michigan, began creating a collection of image-processing utilities for his younger brother John, who was a digital-effects specialist at Industrial Light & Magic. The program, which the brothers named Display, kept growing, and soon many of John’s friends at ILM were using it.

In 1988, Adobe agreed to buy the program, but it didn’t really have high expectations. Adobe gave the brothers no extra resources to finish the software; the company didn’t even require them to go to Silicon Valley to work on it. John remained at Industrial Light & Magic, dreaming up new features for Photoshop, while Thomas stuck it out in Ann Arbor, where he wrote every line of code in the first version.

“The end result was, I never did finish my Ph.D.,” Thomas said. But after about two years, he did finish Photoshop. On Feb. 19, 1990, Photoshop 1.0 began shipping. It was an instant success. Over the next decade, Adobe sold more than three million copies.

Many of Photoshop’s features were built as analogues to techniques that photographers had long been using in the darkroom, but what set it apart from competing image-editing programs was the way it improved on the darkroom. For early users, it was a mind-blowing experience.

“What was amazing to me was the ability to change your mind all the time,” said Maggie Taylor, a photographer whose painterly, collage-heavy art relies strongly on Photoshop. “With film, I had to make a decision, make the exposure and you’re done. And I was often disappointed,” she said. “With Photoshop, it’s like, ‘Wow, I can change my mind as many times as I want.’”

To the chagrin of some old-timers, Photoshop liberated photographers from the rigors of physical perfection (and also from darkroom chemicals).

“In the days before a computer, you had to have very good hand-eye coordination to do photography well,” said John Maeda, a designer and former president of the Rhode Island School of Design. Photoshop changed that.

But more important than what Photoshop did was the way Adobe navigated its market. In 1990, getting a photograph in and out of a computer was difficult because scanners sold for tens of thousands of dollars and printers and monitors had little capacity to produce high-resolution images.

The people who could get the most out of Photoshop, then, were designers working for newspapers, magazines and other industries that used presses.

“But we were always watching the trends to see exactly what features were required as the market evolved,” Thomas Knoll said. Each time some new opportunity came along — from the web to inkjet printers to digital cameras — Adobe quickly tuned Photoshop to the new technology. Each time, Photoshop grew.

In a way, then, Adobe’s turn to cloud-based subscriptions and mobile apps is similar: The business of software has changed, and Adobe is again shifting with it. Adobe now offers some of Photoshop’s best features to outside developers, who can add advanced image-editing capabilities to their apps at no cost. Adobe is also building a suite of apps that offer specific cuts of Photoshop and other programs to a wider range of users.

“When I see all this happening, I’m down with what they’re doing,” said Mr. Maeda, who is now a partner at the venture capital firm Kleiner Perkins Caufield & Byers. “I think the younger generation of designers is looking for new tools, and they don’t care what device it’s on.”